NVIDIA engineers embedded at Valve collaborated on improving driver performance for OpenGL; optimizing performance on NVIDIA GPUs; and helping to port Valve’s award-winning content library to SteamOS; and tuning SteamOS to lower latency, or lag, between the controller and onscreen action.

Maybe im reading to much into this but why would they mention "tuning SteamOS to lower latency, or lag, between the controller and onscreen action."
Does this hint at a Nvidia shield type controller (without the flip up screen), streaming games from your PC ?

Also hinted at was improved Linux support, an area where AMD has traditionally fallen behind its key rival Nvidia. This announcement is particularly intriguing given Valve's announcement yesterday of its Linux-based SteamOS - could an AMD powered Steam box be in the works?

AMD also stated they where working at improving Linux drivers ... this is very confusing

AMD also stated they where working at improving Linux drivers ... this is very confusing

Well, don't forget that third-parties are also developing steamboxes.

This is going to be very interesting, because hopefully we're going to see stylish/compact/quiet barebones tailored for gaming, without having to pay for Windows. I could buy one to install Ubuntu, XMBC and Steam, instead of SteamOS, without feeling remorse for wasting and extra mandatory 100€ on something I won't use (ie Windows), since SteamOS is free.

And then throw in the Good-Better-Best structure for hardware.
Good, may = something to stream games from your PC, dirt cheap, no GPU
Better, may = something able to run most games in its own right, around the price of next gen consoles
Best = sky is the limit, performance over cost.

I'm looking at an i7-4765T (4C/8T - 2.0GHz with 3.0GHz turbo - 35W) to replace my Q6600 ... just needing a little GPU, preferably one without PCIe power plug (HD7750 or its replacement, or a GTX650 Synergy from Zotac).

If I recall correctly, nvidia have been working on streaming games a lot lately. Both through the cloud and with their hand held device. So perhaps it shouldn't come as much surprise that only Nvidia are mentioned at the moment since game streaming is one of valves goals.

Maybe the steam box will come with some form of Nvidia gpu + a CPU rather than an APU like processor. Maybe even one of NVidias tablet processors for a client type steam box.

ARM is unlikely - at least at launch. There's no SteamOS respository for any ARM architectures - just AMD64 and i386. That's not to say there isn't an internal repository that Valve hasn't opened to the public yet, but the evidence would suggest that the first Steam Machines will be x86 only.

defo not AMD, they too close to the two big players with their chip in both and wiiU

Why should this be an issue? There are a tonne of games available on both console and PC, so developers would prefer to use tech that's common between as many platforms as possible. Going nVidia would mean more fragmentation.

I'm very interested to see what they do with the hardware. I've been looking at building a gaming PC for use in the lounge... Compact, high performance or low cost - pick two. (And when I say "high performance" I mean "high performance relative to consoles"; I don't mean some monstrosity running a 4770K with a GTX Titan or GTX 780.)

To be honest, something they really need to nail is how to rate system specifications. One the of the traditional advantages with a console is that it's a fixed hardware spec: if a game is made for a PS3 then the game will run on your PS3; not always the case with PC gaming. If they're shooting at the console market then they can't put up a description that says "by the way this game needs a Steam Machine or a computer with at least an Intel SuperCoreExtreme 5000 processor with 260 jiggawhatsits of supercooled turboinjectionators". They've already stated that they're going to go with a "Good, Better, Best" rating, so for the love of god stick to it.

People who are customising or building their own hardware will know enough (or learn enough) to figure out what spec they need and where they fall on the "Good, Better, Best" scale (I'm guessing that a fair number of us are probably way beyond "best" already! ). But console gamers don't know or care, so make it easy to understand. And that's not to slight or offend people who play games on a console, or imply that they're somehow an entirely different species to people who play games on a PC; my point is that you buy a console so that you don't have to worry about specs.

Oh, and if anyone feels like helping a pathetic loser get to at least 10 friends on Steam then feel free to add me.

__________________Click here to watch me talk nonsense. Well... it's not all nonsense, and I do try to be funny... I might fail miserably but at least I try dammit.

Usually people put their computer specs here. You can ask me if you want to know what mine are.